Bank of America urges dismissal of SEC complaint

By IBT Staff Reporter On 09/25/09 AT 3:40 PM

Bank of America Corp urged a federal judge to dismiss the U.S. Securities and Exchange Commission's complaint accusing it of misleading shareholders about bonuses it let Merrill Lynch & Co pay employees before the companies' January 1 merger.

The bank's request, in a Friday filing, was expected, and came 11 days after U.S. District Judge Jed Rakoff rejected its $33 million settlement with the SEC over the $3.6 billion of bonus awards.

Rakoff, who is still handling the case, was upset that the accord did not require disclosure of the names of executives and lawyers who vetted the bonuses and the decision not to disclose them, and yet left shareholders on the hook for a fine. He called the settlement a contrivance that violates the most elementary notions of justice and morality.

In its answer to the SEC's complaint, Bank of America maintained that the proxy statement for the merger did not contain false or misleading statements, or omit key facts. It also said it was not negligent in preparing the proxy statement.

SEC spokesman John Heine had no immediate comment.

Earlier this week, Rakoff agreed to a schedule to bring the case to trial by March 1, 2010, one month later than he earlier had wanted. He called the March 1 date firm and fixed.

Bank of America, based in Charlotte, North Carolina, faces many lawsuits and investigations by lawmakers and regulators over the Merrill merger, which made it the largest U.S. bank.

New York Attorney General Andrew Cuomo has threatened to sue bank officers, perhaps including Chief Executive Kenneth Lewis. Ohio Attorney General Richard Cordray plans on Monday to update the status of a shareholder class-action lawsuit against the bank.

Bank of America shares were down 25 cents at $16.73 in afternoon trading. They traded at $33.74 before the Merrill purchase was announced on September 15, 2008.

The case is SEC v. Bank of America Corp, U.S. District Court, Southern District of New York (Manhattan), No. 09-6829.